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Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Dissolution of Partnership Firm

Question:

For the dissolution of partnership firm, Match the following -

List 1 List 2
A) Consent of all the  partners I) Dissolution by Court
B) Business of the firm  becomes illegal II) Dissolution on happening of certain contingencies
C) Death of a partner III) Compulsory Dissolution
D) Partner becomes insane IV) Dissolution by Agreement

Choose the correct answer from the options given below.

Options:

A-IV, B-I, C-II, D-III

A-IV, B-II, C-III, D-I

A-IV, B-I, C-III, D-II

A-IV, B-III, C-II, D-I

Correct Answer:

A-IV, B-III, C-II, D-I

Explanation:

The correct answer is option 4- A-IV, B-III, C-II, D-I.

List 1 List 2
A) Consent of all the  partners IV) Dissolution by Agreement
B) Business of the firm  becomes illegal III) Compulsory Dissolution
C) Death of a partner II) Dissolution on happening of certain contingencies
D) Partner becomes insane I) Dissolution by Court

 

* Consent of all the  partners- Dissolution by Agreement: A firm is dissolved by agreement in these cases-

  • (a) with the consent of all the partners or
  • (b) in accordance with a contract between the partners.

* Business of the firm  becomes illegal- Compulsory Dissolution: A firm is dissolved compulsorily in the following cases:

  • (a) when all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract;
  • (b) when the business of the firm becomes illegal; or
  • (c) when some event has taken place which makes it unlawful for the partners to carry on the business of the firm in partnership.

* Death of a partner- On the happening of certain contingencies: Subject to contract between the partners, a firm is dissolved :

  • (a) if constituted for a fixed term, by the expiry of that term;
  • (b) if constituted to carry out one or more ventures, by the completion thereof;
  • (c) by the death of a partner;
  • (d) by the adjudication of a partner as an insolvent. 

* Partner becomes insane- Dissolution by Court: At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds:

  • (a) when a partner becomes insane;
  • (b) when a partner becomes permanently incapable of performing his duties as a partner.

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